Despite the potentially important health and environmental impacts associated with hydraulic fracturing and horizontal drilling technologies, policy control remains largely with the states. Lobbyists representing the Interstate Oil and Gas Compact Commission, an organization that has drafted policies for oil and gas producing states since the 1930s, contend that few documented cases of groundwater contamination can be directly attributed to fracking operations over the past 50 years. An additional point emphasized by industry supporters is that an EPA study was conducted in 2004 that found no evidence of adverse environmental impacts from industry use of these practices (Ground Water Protection Council, 2009). Consequently, the argument went, there was little need for federal oversight from the EPA or from the U.S. Interior Department (for federal lands and offshore operations) to correct a nonexistent problem.
In addition, politically influential trade groups like the American Petroleum Institute and the Independent Petroleum Association of America have fiercely opposed efforts from environmental groups and a handful of congressional allies to require the federal regulation of fracking. In 2005, the pro-gas coalition succeeded in attaining an important policy goal when Congress was persuaded to exempt hydraulic fracturing drilling practices from regulatory coverage under the Safe Drinking Water Act. Earlier political initiatives from the 1980s had already resulted in the enactment of policies allowing companies to avoid compliance with other environmental policies associated with oil and gas drilling actions. This included important disclosure programs such as the “right to know” reporting requirements associated with the 1986 Superfund law and the cradle to grave regulatory processes mandated by the Resource Conservation and Recovery Act, a hazardous waste program (Ground Water Protection Council, 2009).
So what does this mean for state-level initiatives dealing with fracking policies? The Ground Water Protection Council (2009) finds 27 states that have deep shale or CBM gas deposits and enough gas-producing activities to warrant some form of oversight policy. Whether they have the political will to do so appears to vary considerably.3 The following sections cover policy-making activities in two states—Colorado and Texas. Both are major gas-producing states, but there are major differences between the two in terms of population size, region, political culture, and orientation toward environmental policy concerns.
Texas is far and away the leading natural gas production state in the United States, accounting for over 6 trillion cubic feet (tcf) in 2009, or 30 percent of the nation's output (U.S. Energy Information Administration, 2010). It has been a major producer state for oil (and eventually natural gas) since the beginning of the 20th century. There are several major gas fields—or plays—in the state including two of the largest, the Barnett Shale play located in and around Fort Worth and the Haynesville play found in the Eastern edge of Texas and in Western Louisiana (Pless, 2010). A third field, the Eagle Ford, is expected to become another significant source of gas production and may eventually become a source of political controversy because (like the Barnett Play) it is located near a major urban area—San Antonio. Much of the recent upsurge in drilling activity since 2005 is directly attributable to the expanded use of hydraulic fracturing technology (Galbraith, 2011). State data indicate that businesses connected to the oil and gas industry employ over 200,000 people and contribute over $200 billion (or 20 percent) to the economy of Texas (Texas PetroFacts, 2011).
The economic impact of the energy industry coupled with the continuing political clout it wields in state government justifies classifying Texas as an energy dominant state (Wiseman, 2009). A conservative and largely Republican state legislature acting in sync with the past two governors (also Republican), Rick Perry and George W. Bush, have been particularly strong supporters of the energy industry. No fracking-related policy proposals have surfaced within the past few legislative sessions in Austin. Natural gas exploration and production activities have been placed under the jurisdiction of Texas Railroad Commission (TRRC), a bureaucracy that has exhibited more of a promotional emphasis in its dealings with oil and gas companies than concern for safety and environmental issues (Rahm, 2011). The TRRC is responsible for virtually all activities associated with natural gas exploration and production except for the regulation of air quality impacts. The latter task is under the jurisdiction of the Texas Commission on Environmental Quality.
The approach taken by the TRRC in overseeing natural gas fracking operations exemplifies this emphasis (see Table 1). The basic assumption imbedded in oil and gas laws is that any impacts arising from fracking technologies can be adequately handled through the traditional regulatory framework for oil and gas drilling activities, i.e., there is no explicit section that addresses fracking, per se. A recent exception is a limited disclosure policy that was enacted in the summer of 2011 with bipartisan support. Companies are still responsible for obtaining a permit to drill or to deepen a well, complying with casing, cementing, and completion requirements, and utilizing approved methods of waste disposal for fracking fluids (Kurth, Mazzone, Mendoza, & Kulander, 2010). No additional requirements such as an environmental assessment of proposed frack jobs or consideration of wildlife-related impacts are mandated under Texas laws. TRRC officials insist that fracking operations are safe, adding the caveat that no documented evidence exists of groundwater contamination in the 60-year history of frack jobs within Texas (cited in Smith, 2010).
Table 1. State Regulation of Hydraulic Fracturing
|General oil and gas permitting|| || |
| Application to drill||Y||Y|
| Applications to deepen, reenter, or plug wells||Y||Y|
| Permit to dispose of drilling wastes||Y||Y|
|Prenotification for land owners prior to drilling||Y||N|
|Environmental review of proposed fracking operation||Y||N|
|Disclosure of chemicals utilized in fracking operations||Y||Y|
|Limit impact of fracking on wildlife and biodiversity||Y||N|
This is not to say that fracking operations are without critics. Many residents within the 14 county area above the Barnett Shale play in and around Fort Worth hold contrary views. The convergence of technology, the discovery of significant shale gas reserves, and rapidly increasing prices for oil and gas led to the development of the Barnett field in 2001. According to Ward (2011), “the number of new producing wells jumped to 8,036 between 2006 and 2009 . . . and the [current] number of wells in the area is 13,785.” He argues that the sheer number of wells affects environmental quality in terms of increased risk for spills, gas leaks, and declining levels of air quality. These concerns have since been validated by a number of drilling operator mistakes resulting in negative environmental impacts.
One indicator of increased risk is the number of well blowouts (explosions) that occur because of carelessness at the well completion stage coupled with regulatory inaction. Between 1997 and 2006, 14 blowouts occurred at wells located in Wise County, while an additional four were reported in Denton County (Nguyen, 2010). Reports of contaminated water wells in Fort Worth in close proximity to fracking operations were investigated and found to be without merit by TRRC officials. However, inspectors from the regional office of EPA came to a different conclusion, i.e., their tests indicated that water samples contained contaminants that could be traced to nearby drilling operators. The TRCC findings were subsequently overruled (Rahm, 2011). Increases in air pollution can also be traced to an array of drilling activities such as exhaust from internal combustion compressor engines, gas leaks from loose pipe fittings, and vapors escaping from oil tanks. Nguyen (2010) reveals that 50 of the 300 air samples tested from company operations in North Texas by state regulators exceeded clean air health standards established by the Texas Commission on Environmental Quality. Incredibly, this research also indicates that the amount of pollution generated by natural gas companies in Fort Worth now equals the amount emitted from motor vehicles (Nguyen, 2011).
While the surge in natural gas production has produced a corresponding increase in economic prosperity within metro Fort Worth, it has come at the cost of rising public concern about public health and environmental quality (Theodori, 2009) as well as the view that state officials have been insensitive to the policy preferences of local residents. Can city officials take action? A critical distinction in Texas (and elsewhere) is whether municipalities operate under “general law” or “home rule.” Urban areas like Dallas or Fort Worth are typically granted home rule status that allows local officials greater discretion to operate independently of state government, including the enactment of policies that restrict some oil and gas drilling activities, while smaller municipalities working under the constraints of a general law have less leeway to regulate industry decisions (Maxwell, 2009).
Demands for regulatory action from citizens in communities like Flower Mound and Fort Worth have adopted new policies that have withstood legal challenges from affected gas companies. Local authorities in Fort Worth enacted health and safety ordinances such as well-setback requirements from residential areas, streets, churches, and schools, daytime and nighttime noise limits, the use of directional lighting, and restrictions on road construction in certain areas (Ground Water Protection Council and ALL Consulting, 2009). Other restrictions on drilling operations have been accepted in a less adversarial fashion. Sometimes agreements have been negotiated between gas companies and smaller municipalities or neighborhood associations. On occasion, industry officials may try to avoid potentially troublesome land use conflicts altogether through greater use of horizontal drilling.
In short, gas companies operating in Texas enjoy considerable latitude in their pursuit of drilling opportunities with relatively few state-level restrictions but must occasionally make accommodations with city officials when the gas fields are located within local boundaries. The political climate in Austin is quite supportive of oil and gas industry preferences, the state relies heavily on the severance tax on energy resources as a major source of funding for schools and other public programs, and the Texas Railroad Commission has not made any regulatory adjustments to accommodate environmental or health risks associated with fracking operations. Thus, status quo politics provides an apt description of natural gas policy making in the Lone Star state.
Energy companies in Colorado also rely on fracking to gain access to unconventional natural gas reserves that are typically imbedded within coalbed seams rather than shale. Nevertheless, the production figures over the past 5 years have been impressive. In 2009, the state ranked sixth in natural gas production with approximately 1.4 tcf of natural gas withdrawn (U.S. Energy Information Administration, 2010). Like Texas, Colorado has numerous wells distributed widely throughout the state. Considerable drilling activity takes place in two western counties, Rio Blanco and LaPlata, although a sizeable number of smaller wells are located in Weld County in Northeastern Colorado (Colorado Oil and Gas Commission, 2011). According to IHS Global Insight (2009), the natural gas industry employs over 137,000 people in Colorado directly or indirectly accounting for approximately 6 percent of the state's workforce. In production counties with a sizeable percentage of federal land, the importance of revenues contributed in the form of property and/or severance taxes are striking. Bryner (2003) noted that CBM-related industries contributed 43 percent of property tax revenue flowing into LaPlata County coffers in the early 2000s.
Colorado has historically been a probusiness state in terms of facilitating industry access to the development of natural resources, including natural gas. To accomplish this goal, three agencies share at least some responsibilities for overseeing oil and gas production activities. The Department of Public Health and Environmental Quality is in charge of implementing Safe Drinking Water Act regulations and issues permits for the discharge of wastes into surface waters or groundwater. Departmental officials are also responsible for regulating air quality at drilling sites. If fracking operations require the diversion of groundwater, approval must be received from the State Engineer's Office. However, the primary policy actor in the regulation of natural gas drilling activities is the Colorado Oil & Gas Commission (COGC). Commissioners authorize most decisions affecting drilling operations.
COGC represents the agency part of an energy policy subgovernment that has historically maintained close ties to oil and gas company officials as well as members of the state house and senate natural resources committees. This has led to important policy decisions that have clearly produced economic benefits for energy producers. One example is a law originally enacted in the 1950s that allows energy companies to deduct up to 87.5 percent of severance tax obligations to the State of Colorado from any property tax assessments levied by the county where drilling occurs (Hubbard, 2007). The net effect of this statute is that the companies and the counties receive the gold, while the state receives the shaft. In most years, the state receives severance tax revenue from only 5 of the 30 counties with gas-producing wells. Another policy that originated within COGC resulted in a gradual but very lucrative series of decisions allowing companies to substantially increase the density of CBM wells over time—from one well per 640 acres in the 1960s to one per 40 acres in some areas (cited in Duffy, 2008).
The political importance of the natural gas industries in Colorado is evident. However, the state is more politically diversified than Texas and is less economically dependent upon oil and gas than Texas; hence, it cannot be categorized as “energy dominant.” In terms of general political orientations, state political leaders over the past 20 years have typically ranged from conservative to moderate with Democrats faring particularly well in capturing the governor's office, while Republicans have enjoyed greater success in terms of controlling the General Assembly (the state legislature). A second difference is the size and importance of the environmental policy constituency in Colorado as a partial counterweight to the political clout exercised by extractive industry groups. Third, there are a larger number of within-industry conflicts in Colorado that have not only diffused the opposition (from the perspective of environmental groups) but have offered opportunities for forming some rather unusual political alliances that can be readily observed in land use policy conflicts involving energy companies and other user groups (often ranchers).
At a micro level, natural gas policy conflicts in Colorado and elsewhere have centered upon “split estate” issues. In Colorado and Texas, property ownership is split between those who hold title to and often live on the surface of a land parcel and those who own mineral rights (including natural gas) located below the surface. Conflicts emerge when parties with mineral rights seek access to these resources through drilling pads, road construction, removal of obstructions, or similar actions that may result in significant impacts to the surface area as well as the economic and emotional well-being of the owners. Frac jobs may also create surface owner fears related to the possible contamination of water wells and to possible family exposure to chemicals released in the air or water. Gas companies that have purchased mineral rights in Colorado (or Texas) are legally entitled to reasonable access to these resources (which would not be worth much without such guarantees). Companies can avoid some problems by contacting surface owners in advance to work out an agreement regarding conditions of access as well as financial compensation for the loss of property or the opportunity costs of deferred economic activities incurred by surface owners. The surface owner is clearly at a disadvantage here, and the only form of relief that the state can commonly offer is a requirement that the developer post a bond sufficient to cover property damages (Bryner, 2003).
Politically, this has placed gas company officials on a collision course with many rural landowners in Colorado, particularly across the western slope. Many controversies pitting the interests of industry officials against ranchers, retirees, and recreational businesses like hunting guides or wilderness outfitters have erupted with spillover impacts on policy contests and the development of policy proposals aimed at leveling the legal playing field between mineral and surface property owners. Environmentalists who were increasingly wary about the environmental impacts associated with fracking often sided with surface owners like ranchers who previously viewed each other with a healthy dose of skepticism or, in some cases, outright hostility. Other unusual allies of convenience for environmental opponents of fracking included some county commissioners concerned about water quality or retiree complaints and hunting organizations worried about the adverse impacts of large-scale drilling operations on habitat requirements for wildlife (Duffy, 2008).
The emergence of land use and property rights controversies over fracking became increasingly visible because of media reports of water contamination in Garfield County and in Northeastern Colorado near fracking operations. Gas industry officials contend that the relationship between drilling activities and declining water quality is coincidental at best because fracs occur well below aquifers or water wells and the likelihood of frack fluids or brine migrating long distances to sources of drinking water is practically nil—a view shared by COGC officials. However, a 3-year study of over 700 methane samples from 292 locations that was conducted for Garfield County concluded that gas drilling adversely affected water quality in dozens of water wells (cited in Lustgarten, 2009b).
At approximately the same time, the political winds began to shift statewide in favor of the Democrats. After gaining control of the General Assembly in 2004, they succeeded in electing Bill Ritter as governor in 2006 while adding to their margins of partisan advantage in both chambers. The main policy platform for the incoming governor was pushing for a new energy economy that focused on increasing utility usage of renewable energy resources through a strengthened statewide renewable portfolio standard and building upon the state's natural capacity for the construction and use of wind and solar facilities. However, an ancillary campaign focus for Ritter was aimed at making existing energy sources like natural gas more sensitive to environmental policy concerns.
Key policies containing a new proenvironmental focus soon followed. Democratic control of state government led to the enactment of two important laws in 2007. The Oil and Gas Commission Reform Act produced an organizational shake-up of COGC. The number of commissioners was expanded from seven to nine, and membership requirements were altered to diversify an organization previously dominated by individuals with an industry background. Under the new law, appointees were to include individuals with expertise in wildlife, soil conservation, and agriculture to complement members with an oil and gas background. In addition, the directors of the Departments of Natural Resources and the Public Health and Environmental Protection were designated as ex officio members.
A second law, entitled the Colorado Wildlife Stewardship Act, called for natural gas drilling activities to administer oil and gas operations in a manner that is compatible with wildlife conservation goals, a requirement to be met through consultation with the state's wildlife division. This was followed by a contentious 2-year period of rulemaking aimed at translating broad policy objectives into more specific operational guidelines for COGC staffers, culminating in the passage of a new law in 2009 that codified the new regulations. One of the new rules called for gas companies to reveal the chemicals used in the fracking process; however, access was restricted to public health professionals with a “need to know” in response to a leak or spill (Rahm, 2011).
A glance at Table 1 reveals the key differences between Colorado and Texas after the flurry of policy-making actions from 2007 to 2009. The states are alike in terms of the basic features of regulating oil and gas drilling operations. Beyond that, Colorado policy-makers have imposed additional environmental requirements on natural gas companies. In part, this reaffirms the point that energy companies do not wield the level of influence in Colorado that companies have come to expect in Texas. Another factor that carries more weight in Colorado is the strength of nonenergy constituencies such as environmentalists, hunters, ranchers, and wealthy retirees in sparsely populated Western counties. However, the Colorado case also demonstrates the importance of majority party leaders who are sufficiently opportunistic to take advantage of unified partisan control when it occurs to enact high priority policies. One final point is that local governments in both states have successfully adopted ordinances restricting unwanted drilling practices. However, in Texas, the additional policy-making venue may be more important because it provides a kind of regulatory backstop for residents in more populous urban areas to compensate for the more minimalist approach implemented by the TRRC.